(MENAFN - Khaleej Times) The research report said the abu dhabi real estate market continued to show signs of growth and recovery during the quarter ended march 31.
demand for the residential rental market also continues to rise driven by new job creation and government policies leading to 17 per cent rental growth for prime high quality units during 2013 and four per cent growth during march 31 ended quarter says jll the world’s leading real estate investment and advisory firm in its abu dhabi real estate overview first quarter 2014.
the research report said the abu dhabi real estate market continued to show signs of growth and recovery during the quarter ended march 31.
visitors tour cityscape abu dhabi 2014 which concluded on thursday at the abu dhabi national exhibition centre. — kt photo by nezar balout
the first quarter of 2014 continued to witness growth in the prime residential market and further stabilisation of the office and hospitality sectors. retail rents for malls on abu dhabi island witnessed a slight increase during the quarter.
short-term demand will be fuelled by investment and job growth from new major construction and economic development projects combined with a general improvement in market sentiment. long-term market recovery will be dependent on the pace of the government’s on-going initiatives to diversify the economy and generate sustainable new employment growth as many of these initiatives remain a work-in-progress.
residential stock increased by around 1700 units in the quarter bringing the total stock to around 238000 units. additions to supply included units within reem island saadiyat island and al reef.
the residential sales market continues to rise due to positive investor sentiment and increased demand from end users. this led to price growth for the fifth successive quarter — following 25 per cent annual price growth for prime high quality units during 2013 prime residential prices grew by a further nine per cent during the period — although it is important to note that the volume of transactions remains limited.
the overall office market remains over-supplied with new additions to supply continuing to rise. large-scale demand continues to be dominated by government entities and state-owned enterprises; although there are indications that private sector occupier demand is starting to increase.
while prime rentals continue to be stable the future growth of the office market depends on government economic development initiatives to grow new demand and increase private sector activity.
office supply currently stands at 3.1 million square meter with an additional 78000 square meter of office gla expected to enter the market during 2014.
the future additions to supply will continue to place downward pressure on rents for secondary space. there were a number of major completions in the office market this quarter including the nbad building at capital centre and the siemens building at masdar city.
david dudley head of abu dhabi office at jll mena said “it is encouraging to see further signs of growth and recovery. the general theme is selective recovery with different sectors at a different stage of recovery and the residential sector leading the way.”
a two tier market exists with a significant divergence between high and low quality product in terms of quality of location design functionality asset management etc.
he said: “sustained market recovery is very much dependent on continued government investment in to infrastructure and economic development to boost demand.”